Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
what is investor in film
Position:
no response
Reasons:
live deal Q0f F
980293
XXXXXXXXXX S.Tevlin
Attention: XXXXXXXXXX
February 10, 1998
Dear Sirs:
Re: Subsection 125.4(4) of the Income Tax Act (the "Act")
We are writing in response to your letter dated February 2, 1998 wherein you requested our opinion with respect to the Canadian Film or Video Production Tax Credit described in section 125.4(1) of the Act.
Specifically you asked whether an investment by a non-resident would cause the denial of the tax credit pursuant to subsection 125.4(4) of the Act.
The situation described in your letter is an actual fact situation and written confirmation of the tax implications inherent in proposed transactions are given by this Directorate only where the transactions are the subject of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R3. Consequently, we can only offer the following general comments.
Where a person meets the definition of investor in subsection 125.4(1) of the Act and may be entitled to deduct an amount in respect of a particular production but such investor is not subject to Canadian taxation law, it is our view that subsection 125.4(4) may not apply to deny the tax credit solely by virtue of such investor. Whether or not this is the case in your situation is a question of fact.
Accordingly, we cannot confirm that subsection 125.4(4) would not apply to the situation described in your letter.
Should you wish to submit a request for an advance income tax ruling, we are prepared to give such a request priority attention.
Yours truly,
for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
